Top 10 Insights to Open Book Management: Part 1by Dr. Ron Arndt
Open Book Management is an approach to operating a business (and dentistry is a business) that helps everyone focus on making the business profitable. By promoting a better understanding of the financial side of your practice, you give your employees the tools they need to make more well-rounded, business-savvy decisions during their day-to-day routines.
How well do your employees know your dental business? I mean, really KNOW your business?
Are they educated on the basics of how to make money for the business? Do they know the reasons they are being asked to reduce costs, increase productivity, and serve the customer with excellence?
I can feel some of you cringing, but don’t worry – increasing your focus on the profitibaility of your practice does NOT mean neglecting your patients or exposing your entire financial picture.
On the contrary, it means taking an even closer look at what your patients really want and delivering it in a consistent, efficient, cost-effective manner. You do this by demonstrating to your team the economics of delivering quality care.
1. Be Open To New Ways of Solving Old Problems
If you continue to do what you have always done, you will continue to get what you have always gotten! If your business simply manages to “scrape” by, if your overhead continues to consume a higher and higher percentage of gross income, or if patient satisfaction is declining, you need to rethink your approach to solving these problems. Open-Book Management provides an avenue to better manage costs, which ripples out to many other areas of your practice.
2. There Is No One “Right” Way
Just as there are several solutions to every problem, there are different ways to implement Open-Book Management. The key word however, is open. The attitude of leadership, the characteristics of the employees, and the current practice profitability will help form your open-book style.
3. Let Go
One of our greatest fears is losing control. Another is that once our employees see the financial statements, they will use them against us. They may even figure out how much money we make. You may even fear that your patients or your competition will about your practice operation. Fear is False Evidence Appearing Real. Risk-takers earn their rewards. There is no reason to operate in the dark any longer. Your employees and those you serve WANT you to be successful. Your competitors are too worried about themselves to worry about you.
4. Quit Solving People’s Problems For Them
When an employee approaches you with a complaint about your lousy pay program, you probably either become defensive or set out to solve the problem. Instead, give your employee the information she needs to develop alternatives that serve her interests AND those of the practice. Once she sees the whole financial picture, she will have a better perspective on her salary and more information on which to develop an alternative pay program.
5. Show Employees That They Have A Direct Stake In The Business’s Success
The objective of the business is to make a profit. All employees need to be a part of that process. Teach employees that they are business-people and not just workers. If the practice is profitable, they get a piece of the action. If there is no profit, they don’t.